Health law could mean fewer full-time workers, CBO says

Feb. 4, 2014
|

Ruben De La Rosa, left, helps attendees to sign up for health coverage during an Affordable Care Act enrollment fair held at the University of Texas-Pan American on Feb. 1, 2014, in Edinburg, Texas. / Joel Martnez, AP

by Kelly Kennedy, USA TODAY

by Kelly Kennedy, USA TODAY

WASHINGTON - Workers eligible to buy cheaper health insurance or receive financial incentives under the Affordable Care Act may choose to work fewer hours, according to a Congressional Budget Office report released Tuesday.

Those choices, the report said, may cut the number of full-time workers by 2.3 million people by 2021. CBO originally had estimated that 800,000 people may make those choices.

"By providing subsidies that decline with rising income (and increase with falling income), and by making some people financially better off, the Affordable Care Act will create an incentive for some people to work less," the report states. "The structure of the tax code - in which rising incomes push some people into higher tax brackets - will also reduce labor force participation slightly."

For example, someone who works full time to keep employer benefits may choose to work part time and buy health insurance through the exchange. Or, someone not eligible for Medicaid or who would like more help through subsidies could drop employment hours to make those gains.

The report also reduces CBO's original projection of 7 million people signed up for private health insurance through the state and federal exchanges by the end of 2014 down to 6 million people insured by the end of the year. Medicaid enrollment projections were reduced from 9 million people to 8 million people.

"Over time, more people are expected to respond to the new coverage options, so enrollment is projected to increase sharply in 2015 and 2016," the report said.

Some Republicans immediately jumped on the new numbers as examples of why the law could cause job instability.

"Today's CBO report only underscores the serious problems Obamacare will cause for this country," said Rep. Phil Roe, R-Tenn. "Despite the administration's rhetoric, the number of Americans estimated who will gain health coverage under this law continues to fall."

While Roe called the report "verification" that law will cause layoffs, the report said decreased hours will be the choice of workers, not employers.

However, the CBO report specifically said "the estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply rather than from a net drop in businesses' demand for labor."

White House officials said the report showed the Affordable Care Act does not hurt jobs.

"CBO's findings are not driven by an assumption that ACA will lead employers to eliminate jobs or reduce hours, in fact, the report itself says that there is 'no compelling evidence that part-time employment has increased as a result of the ACA,'" White House press secretary Jay Carney said.

You will automatically receive the VisaliaTimesDelta.com Top 5 daily email newsletter. If you don't want to receive this newsletter, you can change your newsletter selections in your account preferences.